The biggest shift in UK employment law for a generation
The Employment Rights Bill 2025 introduced some of the most significant changes to UK employment law in decades. If you run a small business, you can't afford to ignore them. Here's a plain-English breakdown of what's changed and what you need to do about it.
Day-one rights: the big one
Previously, employees had to wait two years before gaining protection from unfair dismissal. From 2025, workers have the right not to be unfairly dismissed from day one of employment. This is perhaps the single biggest change for small businesses.
What this means in practice:
- You can no longer dismiss someone in their first two years without a fair reason and a proper process
- Probation periods still exist, but they must be genuine and have defined expectations
- A well-written employment contract and probation review process is now essential, not optional
- You should document performance concerns from the very start of employment
Flexible working: it's now the default
Employees can now request flexible working from day one (previously 26 weeks). You must respond within two months and can only refuse on specific statutory grounds. A blanket "no" is no longer acceptable.
Employers must provide a written reason for any refusal. The eight permitted reasons include things like the burden of additional costs, inability to reorganise work, or detrimental impact on quality — but you must demonstrate this, not just state it.
Zero-hours contracts: new protections
Workers on zero-hours contracts now have the right to request a contract that reflects their regular hours after 12 weeks of consistent work. If a worker regularly works 25 hours a week for 12 weeks, they can ask for a contract that guarantees those hours.
Enhanced redundancy rights
The threshold for collective consultation (currently 20+ redundancies in 90 days) remains, but the obligation to consult meaningfully has been strengthened. Small businesses making even a small number of redundancies must ensure the process is genuinely fair.
What you should do right now
- Review your employment contracts — probation clauses, flexible working policies, and dismissal procedures all need checking
- Implement a probation review process — monthly check-ins with documented feedback
- Create a flexible working policy — even if you need people on-site, you need a process to handle requests fairly
- Train your managers — they need to understand the new landscape
- Seek HR support — the cost of getting this wrong (employment tribunal) is far higher than getting proper advice now
The cost of non-compliance
Employment tribunal claims are expensive — the awards for unfair dismissal can be substantial, and that's before legal costs. More importantly, many tribunal losses are linked to poor HR processes, not bad intentions. Most employers who lose tribunal cases simply didn't follow the right process.
If you're not sure whether your current setup is compliant, book a free HR health check with us. We'll tell you exactly where you stand.